Small Business? Group Benefits? No Way!

Aug 27, 2018

This is the usual reaction I find when a small business of twenty employees or less is approached about employee health, dental or vision benefits.

Many believe it’s too expensive. Well, it may be. But too expensive for who? The employer? I think not. The employee, maybe, but let the employee decide that for themselves. Offering benefits can only enhance an employer’s image to recruits regardless of the expense to either side.

Employee benefits, in the last five years, have become much less stringent on the rules regarding what an employer must contribute, how much paperwork an employer must complete and who can enroll, save for the ACA guideline regarding husband and wife groups but we’ll get to that later.

In today’s benefit marketplace many carriers have relaxed the regulations regarding employer contributions to be so minimal it allows for any employer to at least make a benefit offering. For example, Anthem Blue Cross Blue Shield, here in Colorado, requires no contribution. Yep, that’s right, none, zero, zip, nada. Now, I don’t recommend taking this position with your group benefits, because it gives your employees no incentive to enroll, but it does give you an option if you see no other way. Many carriers will allow you to contribute as little as $100 per employee or in Kaiser’s case, just contribute something.

It doesn’t take much anymore, and the morale boost, tax breaks, and ROI to the company can offset any expense you, as the employer, may incur.

But why did carriers do this? The simple answer is the ACA, Health Care Reform or Obamacare. Whichever term you prefer, it made the individual market a mess and health insurers today would prefer you to be in a group plan vs. an individual plan. In fact, Kaiser, in Colorado, decided to stop paying brokers to sell their individual plans. They just don’t want you on them!

Prices, plan offerings, plan structure and the inherent risk to the insurers are all much better inside a group plan. So, carriers made it easier for you, the small business, to offer benefits to your employees.

Ahh, but, “employees,” that is the key term which leads us to the topic of husband and wife owned businesses. (I said I’d get back to it). Unfortunately, the ACA took away the availability for groups to be “Owner Only.” This means that your business must have at least one, non-spousal, employee on payroll. They must be a valid employee with a W2 or weeks of payroll reports or show up as a full-time employee on the quarterly tax report you submit to your state. If you can not show proof of an employee other than a spouse, then the opportunity for group medical coverage is unavailable.

But medical coverage is not the only benefit. Many times, it seems that offering or not offering medical coverage becomes a road block to many businesses mulling over the idea to offer benefits. Let this not be the case. So, you may decide that you don’t want to pay for medical benefits, but that doesn’t mean you cannot offer a whole variety of other options on a “voluntary” basis.

Voluntary benefits are paid for by the employee but help you as an employer. Not only do they cost the employer nothing, but they’ll also boost morale and, more importantly, will help reduce your payroll tax burden. Remember, benefits come out, in most cases, “pre-tax.” This means for every dollar taken pre-tax from an employee’s paycheck for voluntary benefits it reduces your payroll tax by small percentage. It’s a win/win.

Voluntary benefits can include Dental, Vision, Life Insurance, Short Term Disability, Long Term Disability, Hospital Care, Accident, Critical Care, and Cancer plans. The list goes on.

All these voluntary plans can be put in place by your business today with no cost to you while creating a culture of care and wellbeing for your employees. So, why not do them? Great, you can’t think of a reason either. Let’s get started!

Give Unlimited Benefits, Inc. a call today at 888.587.9370 and talk with Clint Perry about creative options to enhance your business growth and employee experience. We’re here with Unlimited Solutions, Unlimited Service! We look forward to speaking with you.

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